Samsung is eating its lunch. Early on HTC was the number one Android phone company. Today Samsung holds that title. Samsung is estimated to ship 83 million phones versus 50 million from HTC this year.

It's also got new competition from Huawei and ZTE. In addition to stiff competition from Samsung, it will have to deal with Huawei and ZTE, two Chinese companies willing to operate on thin margins and going after the same market.

The patent problem. HTC is going to pay out $1.1 billion in royalties this year. That's a big chunk of revenue. And it's still fighting Apple, which could extract even more money.

The Android market is going to be rough. Paying out royalties cuts into margins, in a space where margins will be tough. Your competing with Motorola, Samsung, ZTE, Huawei. How can you establish yourself and still make a decent profit?